The Mendenhall Wastewater Facility is among the many locations in Juneau that local leaders say are in need of overdue major maintenance and upgrades. (Mark Sabbatini / Juneau Empire file photo)

The Mendenhall Wastewater Facility is among the many locations in Juneau that local leaders say are in need of overdue major maintenance and upgrades. (Mark Sabbatini / Juneau Empire file photo)

Assembly may ask voters to OK $20M utility bond and $10M school bond, cruise visitors to pay $7 more in fees

City leaders also looking at hikes to property taxes and utility rates to cope with snowballing costs.

Put simply, a lot of old bills are coming due and some big new bills are about to arrive.

Local voters may be asked this fall to approve a $20 million bond to upgrade water and wastewater utilities, plus another $10 million bond for Juneau School District capital improvement projects, as Juneau Assembly members on Wednesday night voted in favor of having city staff conduct further study about the bonds.

The votes occurred on the same night Assembly members, meeting at the Finance Committee, also gave initial approval to raising per-berth cruise ship dock fees by $7 beginning in 2026. City leaders also discussed how much the property tax mill rate will need to be raised for the coming fiscal year that starts July 1 since a variety of higher and new expenses — with flood mitigation being notable among them — have officials agreeing a balanced budget isn’t realistic with the current 10.04 mill rate.

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Assembly members acknowledged the combination of new bond measures, a tax increase and a significant proposed hike in utility rates all being proposed at roughly the same time may be difficult for some residents to swallow. Some noted Juneau residents last October passed a $12.75 million bond to upgrade police and fire communications, and a $10 million wastewater facility upgrade bond, so voting in favor of more bonds a year later may be a tough sell.

“My fear would be that we raise (utility) prices and then we ask voters to spend more money on wastewater in the same year, which could backfire on us even if we know that it would save money in the long term,” said Christine Woll, chair of the Finance Committee. “That argument doesn’t always work well in the wrong circumstances.”

However, in terms of bonds “I do think that exploring schools is a good idea because there’s always need (and) there’s, I think, always voter support,” she said.

The financial hardship with both utilities and schools is a long list of maintenance and improvement projects that have been long neglected, according to city officials. While some recent actions have been taken to address the need — including last year’s wastewater bond and the city agreeing to take over day-to-day maintenance of some buildings used by the school district — it isn’t nearly enough for buildings and infrastructure in disrepair.

Furthermore, City Manager Katie Koester noted in a memo to Assembly members, “there are many future capital projects that need bond support,” such as long-term flood mitigation that could require the city to pay many millions in matching funds to secure federal funding for a project that could well exceed $100 million.

“In a similar vein, a $300M Juneau Douglas North Crossing will likely require a 20% local match,” she wrote, noting that could result in a $60 million bond on the ballot in 2029. “In addition, there are needed improvements to Centennial Hall ($25M), rehabilitation and/or Demolition of Marie Drake ($9M) and Zero Waste initiatives just to name a few.”

Koester, as a starting point for Wednesday’s discussion, suggested in her memo the Assembly consider a $10 million utility bond and $15 million school district bond for the fall ballot.

Assembly members by a 7-1 vote, with Woll dissenting, increased the utility bond proposal to $20 million, based on the argument that it will result in less of an increase to monthly water and wastewater rates currently under consideration.

“Knowing that those rates are due to skyrocket, that anything we can do through a bond to bring that down I think would be well received by the public,” Assembly member Maureen Hall said.

The city’s utilities division is proposing an increase of 10.25% and wastewater 12.75% a year for each of the next five years, totaling more than 60% and 80% respectively. Each $10 million in bond funding would decrease the annual hikes by about 3%, according to Koster.

A school maintenance bond also had broad Assembly support, but some members said whether to put a bond on the ballot and for how much should wait until the Legislature completes its work on next year’s budget, which will give local leaders an idea how much state funding will be available.

At the same time “we should absolutely prepare a bond package for school capital improvement projects so that we are ready to put it forward,” Assembly member Neil Steininger said.

The Assembly unanimously approved having city staff further research the possibilities of a $10 million bond proposal, after a proposal to increase the amount to $20 million was rejected. Officials noted the amounts and items funded in both bond measures will be subject to change as staff gathers more details.

Adding $7 to per-berth cruise dock fees gets early OK

Assembly members on Wednesday also unanimously gave an initial OK to increasing dockage fees by $7 per lower berth, which refers to the number of standard beds on a ship (i.e. two in a double cabin, regardless of whether both are occupied or a rollaway is provided for a third passenger). The proposal put forward by Alexandra Pierce, tourism director for the City and Borough of Juneau, would generate roughly an extra $2.5 million in addition to the $2.5 million already collected.

The increase would make Juneau’s fees consistent with other regional ports, Pierce said. She said cruise industry representatives, while not opposing the increase, asked for a two-year adjustment period before it takes effect.

The Assembly approved what amounts to a one-year delay if the ordinance is approved. The next step for the proposal will be forwarding it to Juneau’s Docks and Harbors Board for review and comment.

Assembly members also endorsed by a 5-3 vote the idea 0f using the extra fees for dock-related purposes such as security and restroom maintenance, thus freeing up separate Marine Passenger Fees that are intended to be used on a wide range of projects and services intended to address cruise tourism impacts.

• Contact Mark Sabbatini at mark.sabbatini@juneauempire.com or (907) 957-2306.

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